"KAZAKHSTAN In the new global reality: growth, reform, development"
Date: 2016-08-10 09:44:35
Message from the President of the Republic of Kazakhstan Nursultan Nazarbayev to the people of Kazakhstan. November 30, 2015
"KAZAKHSTAN In the new global reality: growth, reform, development"
Dear people of Kazakhstan!
Dear MPs, members of the Government!
Ladies and Gentlemen!
A few days later the story will start counting the 25th year of independence. Just a quarter of a century, and Kazakhstan took place as a sovereign nation's economy, is included in the global economic ties, and as a state that has become a full participant in the global family of nations. We endured many trials together, steeled and strengthened. We have never seen in our history the pace of successful economic development. Never before have our people did not live as good as living now. We have achieved considerable.
Now the world is changing rapidly. There comes a different era. Before our eyes, a new global reality with different opportunities and risks. Today, Kazakhstan's economy adversely affected by a number of external factors caused by the collapse in world markets. The origin of the global crisis does not depend on us. No one is immune from the effects of global crises.
I. The challenge of the new global reality
Now we are also important to see all the challenges of the world.
Firstly, the current global crisis is inclusive. Instability practically all world markets - financial, hydrocarbon, metals, food and others. This is the main reason for the decline in demand for our exports.
Second, the economic slowdown occurs in all economies of the world. No one is surprised by a steady decline in growth forecast for global GDP. With the fall of 2011. The International Monetary Fund has revised 6 times forecast figures, reducing them from 5 to 3 percent. And apparently, this is not a limit.
Third, there is no oil super incoming today.
Fourth, the global economy is under pressure of political factors. The world has become unstable. Major powers have imposed sanctions against each other. Between them the confidence plummeted. Instability and conflict in the region of the Middle East, North and Central Africa led to massive flows of refugees. Every day brings reports of terrorist attacks and the deaths of dozens of people. A serious threat to the world today is international terrorism. This is the result of destruction of statehood by the interference of external forces in the internal affairs of sovereign states.
The development of the world will take place against the backdrop of fierce competition of global and regional centers of power. The challenges of the new global reality, we must oppose a comprehensive strategy of action based on our real possibilities.
II. Anti-crisis opportunities of Kazakhstan
Global crisis - is not only a risk, but also new opportunities. Most global companies have become successful in the critical periods of development. Virtually all countries have been successful in the past half-century, we started from scratch. And Kazakhstan was born in our time of crisis. The first decade - the most difficult period of the Independence - we were basically "without oil". Independent Kazakhstan has always developed in spite of external economic elements. Is was favorable for us the first half of the 90s of the last century, when we declared our independence? While production has stopped, people lost their jobs and livelihoods. Decent, step by step to overcome this crisis. As soon as our country began to feel the first results of change, the financial crisis broke out in Southeast Asia, 1997-1998.
An important positive significance were taken while the strategic decisions and actions. This large-scale privatization and the arrival of our economy most multinational companies. At that time, we started construction of a new capital - Astana, began working the Caspian Pipeline Consortium, launched Strategy "Kazakhstan - 2030". The importance of the decision to establish the National Fund has become absolutely clear that erupted global financial crisis of 2007-2009. Almost $ 20 billion - 14 percent of Kazakhstan's GDP - has been allocated for the maintenance of employment, repair and construction of roads, improvement of cities and villages. Help received the banking sector, farmers, small and medium businesses. Thousands defrauded by unscrupulous developers participatory construction could thanks to the goodwill of the state to get new housing.
We have developed and consistently implemented the two anti-crisis plan. This is our great and successful experience in overcoming economic difficulties. The current global crisis suddenly fell on our heads. I have repeatedly said that a new wave is almost inevitable. At this time, Kazakhstan first applies a proactive anti-crisis strategy.
Firstly, we have already begun a second five-year industrial-innovative development, that is, create an economy independent of raw materials.
Secondly, we adopted the State program of infrastructure development "Nurly Jol". An important aspect of crisis management measures associated with the transition of the national currency to a floating rate.
Thirdly, we will implement the "Plan of the Nation. One hundred concrete steps to implement 5-institutional reforms. " Parliament is working on a law-fulfillment of the Plan of the Nation. It is more than 80 laws. They will start work on 1 January 2016, as we planned. To remove administrative barriers to small and medium-sized businesses, improving governance, education and health. All these measures would also give a margin of safety to the state, society and our economy.
Fourth, we have accumulated the necessary public funds and foreign reserves.
Fifth, on my instructions, developed designed options, as I said before, in the event of lower oil prices and up to 30, and up to 20 dollars per barrel.
Sixth, the drivers of economic growth in Kazakhstan, becoming the new economy created in the framework of innovative industrialization. Many manufacturing sectors showing growth. In five years, the manufacturing industry grew by 1.3 times, chemical industry and construction materials - by 1.7 times. Release engineering products increased by 2.2 times, and exports - by 3 times. It implemented more than 800 industrial projects. This year, the steel industry has grown just 15 percent, chemicals - by 3.2 percent. Manufacture of mineral products - by 3.2 percent, clothing - 4 percent. The World Bank and the Asian Development Bank forecast for Kazakhstan higher rates of economic growth in 2016.
Seventh, changing economic behavior of Kazakhstan. There is an increase in productivity by more than 60 percent.
Dear Kazakhstan
Two years ago I published the Strategy "Kazakhstan - 2050". During this time, we have achieved outstanding results for its implementation, despite the negative impact of the global crisis.
Firstly, in terms of the Global Competitiveness Index Davos Economic Forum, Kazakhstan ranked 42 in the world.
Secondly, in the world ranking of countries to create the most favorable conditions for business, Kazakhstan took the 41 position.
Thirdly, today, November 30, Kazakhstan de jure become a full member of the World Trade Organization. It officially will be announced at a meeting of the WTO General Council. This event is a milestone in the history of independent Kazakhstan. It is a recognition of our country as an equal trade and economic partner. Kazakhstan's accession to the WTO opens up new opportunities for our exporters and foreign investors who come to the key sectors of our economy.
III. Our main anti-crisis strategy
Today, a lot depends on us to start our great and the idea of Kazakhstan's way Mangilik El. We have a strategy of action for the long, medium and short-term.
Now, and at any other time, our main anti-crisis stratagem identical three simple but important concepts: growth, reform and development.
First - this rise. It is primarily a question of economic growth. With regard to the current problems, we need to restore such economic growth that will provide entry of Kazakhstan into the top thirty most developed countries in the world. We need to find new sources of growth via the internal disclosure of private initiative.
Second - this reform. They provide the stability of the economy, society and the state. Now we are implementing the "Plan of the Nation. One hundred concrete steps. " They are comparable in scale with the large-scale reforms, which we carried out in the 90s. We are vital to a deeper reform of the state and corporate management, financial and fiscal sectors.
Third - this development. In the twenty-first century, the main factor of development is a continuous modernization of all spheres of society. We are working on a large-scale transformation of the state, public and private institutions on the principles of society of universal labor, high social responsibility, targeted assistance to the most vulnerable segments of the population.
IV. Five areas of crisis and structural change
In the near future, we need to implement comprehensive anti-crisis and structural changes in the following five areas.
FIRST. Stabilization of the financial sector
Our most important task - to quickly stabilize the financial system, to bring it into line with the new global reality.
Firstly, it is necessary to ensure the effective functioning of the financial sector under a floating exchange rate of tenge. The fundamental point is that the return to the practice of infinite sustain the national currency at the expense of the National Fund will not. National Bank is necessary to conduct stress testing of all subjects of the banking sector on the subject of non-performing loans. According to the results it is necessary to take measures for their recognition and write-off. Banks have been unable to solve the problem
Capitalization should "go" from the financial system. Kazakh banks have to comply with all international standards, including the Basel Committee and the International Monetary Fund. It is important to strengthen confidence in the national currency by expanding the tool "de-dollarization".
Secondly, in the framework of inflation targeting, the National Bank should reduce inflation to 4 percent in the medium term. To this end, a mechanism should be used fully flexible interest rate.
Thirdly, it is necessary to eliminate the existing National Bank's institutional defects. From under its control is necessary to bring the Unified Pension Fund, problem loans and other financial institutions.
Fourth, in 2016 pension assets to be transferred under the control of private Kazakhstani and foreign companies. In order to increase the yield of pension savings is necessary to revise approaches to the investment of pension funds. It is necessary to treat and manage the Pension Fund as well as the National Fund.
National Bank should regularly provide the public and financial institutions to full information on their activities. It is important to establish a normal working dialogue with all participants of the financial sector. Only after the adoption of these urgent measures can begin to stimulate the economy, including monetary methods. I believe that the new leadership will be to properly manage the National Bank. We all need to believe in the national currency - tenge. Deposits in tenge - now it is the best tool for storage savings of citizens.
SECOND. Optimization of fiscal policy
"Living within our means" - this is our principle, and proven correct model of fiscal policy, particularly under the influence of the global crisis.
Now we notice a decrease in tax revenues by almost 20 percent. Volumes fell a quarter of VAT and Corporate income tax - 13 percent. Raising taxes - no way out. It will only mean additional pressure on the business. To cover budgetary spending due to the National Fund - short-sighted. We do not know what else will turn to the side of us the next few years. Therefore, my position of principle - the use of the National Fund for current expenses should be discontinued. The only mechanism should remain an annual guaranteed, fixed transfer from the National Fund to the republican budget. I instruct the Government to develop a new concept of formation and use of the National Fund in the new global reality.
We need to rethink the whole system of government revenue and expenditure. First of all, we should expand the revenue base budget. In 2017, it is necessary to enter the place of the current VAT sales tax. It is inefficient to abolish all tax exemptions. Tax regimes need to optimize - leave only three levels. This is - a common patent for individual entrepreneurs and the special tax regime for small and medium-sized businesses, as well as the agricultural sector. Such a mechanism will display the "shadow economy" to light.
The main task of the government should be to improve transparency in the tax sphere. Only in this way, each subject will be interested in the economy to pay their taxes in full.
The government should ensure the effectiveness of tax administration. Now the terms of legalization of property extended until 31 December 2016. The adoption of additional incentives for the return of property and money in legal circulation. Guarantee the confidentiality and protection from prosecution. I instruct the Government once again to analyze the conditions of legalization and, if necessary, to strengthen guarantees its participants. I urge anyone who is thinking more about participation in the legalization of property, take advantage of this opportunity.
From 1 January 2017 will come into force universal declaration of income and expenses. Thereafter, arrangements will be made to disclose accounts and assets, wherever they are, to find out their origin and taxation, including with the help of the OECD.
Now, on measures to optimize budget spending. I instruct the Government to conduct a full audit of all budgetary programs. In a crisis, everyone is important tenge. Inefficient costs or expenses that may be covered at the expense of the private sector should be excluded from the budget. It is necessary to review the costs of the regional and industrial development.
It should review the system of public expenditure and subsidies. Now a number of industries at the expense of lives of the state. At the same time, for example, through the instruments of state corporation "KazAgro" are not available for half of all agricultural producers. For the "unloading" of budget expenditures must actively apply the mechanisms of public-private partnerships. It is necessary to work out additional measures to encourage private investments in priority sectors of the economy. It is important to increase the involvement of private investors, not only for the construction of roads, pipelines, hospitals, schools and other facilities, but also to their renovation and maintenance. All liberated by means of optimization of budget expenditures must be directed, primarily for projects that will bring tangible results for the population.
THIRD. Privatization and the promotion of economic competition
Today it is important to free up internal resources as much as possible to ensure stable economic growth. To do this, we must use two effective tool - large-scale privatization and expansion of competition. What's holding back growth and competitiveness?
First of all, a large public sector - more than 7000 enterprises. Holding "Samruk-Kazyna" and "KazAgro" effectively control huge assets in industry and agriculture. Assets Fund "Samruk-Kazyna" make up more than 40 percent of GDP, includes more than five hundred "grandson" and "great-granddaughters." Holding "KazAgro" and "Baiterek" turned into inefficient intermediaries between the budget and banks. All this is accompanied by overstaffed and consumption of huge budgetary resources, while at the same time leads to the crowding out of private investment and initiative.
Now it is important to remove the restrictions on the privatization of the public sector. It is necessary to revise certain provisions of the Law "On State Property" and the Civil Code, to reduce the list of strategic facilities not subject to privatization. I instruct the Government to develop a new program of privatization, including in it all the organizations owned by the state. In particular, members of the "Samruk-Kazyna", "Baiterek" and "KazAgro". After the privatization of the three managers of the holding must be converted into a compact organization.
Privatization should be carried at fair market value, open and competitive. Key mechanisms should be listing on the stock market and public auctions. It is necessary to create conditions for the maximum participation of local and foreign investors. I instruct the Government to cancel the pre-emptive rights of shareholders to acquire the assets disposed.
Further, the Government should create the conditions for free and fair competition.
First, I assign the Government to work out concrete proposals for strengthening the anti-monopoly activities. We need a separate law on anti-monopoly agency, with clear regulation of its status and the order of work.
Secondly, it is necessary to eliminate the distortion of market incentives in the form of artificial price control. I instruct the Government to continue its further transition to market prices in all sectors of the economy.
Third, competition policy must go hand in hand with effective regulation of the bankruptcy process and the rehabilitation of inefficient companies. Market economy - a strong competition. Losers should be able to withdraw from the market or to start over. We have no such. Inefficient companies are lining up for the different kinds of subsidies and incentives from the state. Not one developed country bankrupt companies does not lead to the collapse of the industry and stop companies from laying off workers. In place of ineffective managers have new owners who bring with them the investment. We should not "pull" non-competitive company by the State. I instruct the Government to develop a clear and simple procedure of bankruptcy for individuals and legal entities. It should be as easy as possible.
Dear businessmen!
I want to appeal to the business class, all wealthy Kazakhs, all businesses and business people. The State goes on in our history, an unprecedented action on privatization and economic liberalization. The country has already given many of you an opportunity to earn and be on the front pages of business magazines. I urge you to actively participate in the legalization of capital, privatization tenders. You will help yourself and Kazakhstan, to all our people.
FOURTH. Foundations of a new investment policy
In the next decade, Kazakhstan needs:
- To provide an annual economic growth rate of 5 percent;
- To increase the export of processed goods by at least 2-fold compared to 2015 and to bring it to $ 30 billion a year;
- To increase the annual volume of investment in the economy more than 10 billion dollars, and in general for 10 years - no less than 100 billion dollars;
- To create more than 660 thousand new jobs, increase productivity by 2 times.
Such growth can be achieved only by the formation of new drivers to ensure the inflow of export revenues.
The axiom of the new global reality is that only a diversified economy can effectively counter the consequences of the global crisis. Therefore, we are implementing a program of industrialization. We need new investment policy.
Firstly, it is important to attract private investment with a focus on transnational corporations. We must form a favorable environment for attracting "difficult investment." This year decided to create an international financial center "Astana". He will become a regional hub in the field of Islamic financing, private banking and reinsurance. Kazakhstan has become a leading country in the region with strong institutions, competent, efficient and predictable government. We must have the best technical staff, world-class infrastructure, ensure public order and personal safety of people.
Further reforms to improve the investment climate, should be carried out in cooperation with the OECD and other international financial institutions. I instruct the Government within three months to submit a detailed plan to improve the investment climate. In addition, to enhance work with investors entrust to establish Government Council, aimed at attracting investors and improving the investment climate. In the regions, it is necessary to establish similar tips to attract investment for projects of local significance.
Secondly, it is important to form a regional driver of economic growth. All investment projects are implemented directly in the regions. It is therefore necessary to develop a separate program for the 6 macro-regions - Southern, Northern, Central and Eastern, Western, Almaty and Astana. Around the large regional projects need to develop small and medium businesses. Therefore, business support program "Business Road Map - 2020" should be part of the investment programs of macro-regions. There should be measures to increase labor mobility, above all, aimed at stimulating the migration of labor surplus in regions.
Macro-region must join a single transport, logistics and communications architecture, created in the framework of the "Nurly Jol". Currently, 11 projects are implemented in key areas of "Center-South", "Center-East", "Center-West". The construction of railway lines "Borzhakty - Ersai", "Almaty - Shu" and the ferry in the port of Kuryk. These projects already provide jobs 72 thousand people. I instruct the Government to step up the implementation of this program.
At the same time, given the economic situation, it is necessary to diversify the sources of funding. During my visit to China reached an agreement with Eximbank of borrowing amounting to $ 2.6 billion. Now the state budget is built many roads. But you have to bring to these projects of foreign and local investors. In the short-term projects of the program "Nurly Jol" should lead to the funding model with the involvement of private capital.
Third, it should now be actively explore export niches in the global and regional markets. We should effectively use the economic potential of neighboring countries. In the first place, it is China, Russia, Iran, Mongolia, India, Pakistan, Central Asia and the Caucasus. These countries annually import goods and services to more than 3.5 trillion dollars. It is necessary to conclude a Free Trade Agreement of the Eurasian Economic Union, a key regional markets. The government should work out these issues with our partners and solve them for the benefit of all. MFA is necessary to connect all the resources of Kazakhstan diplomatic missions to perform this task.
Fourth, we need to maximally develop the training of technical personnel. Technical and vocational education should be a major focus of investment policy. To do this, you need to create centers for training in cooperation with Germany, Canada, Australia and Singapore. They will become a model of technical and vocational education for the whole country.
Fifth, it should increase the innovative potential of Kazakhstan's economy. It is important to lay the foundations for a future economy. We need to develop competence in the field of smart technology, artificial intelligence, systems integration kiberfizicheskih, energy future, design and engineering. This can be done only through the construction of an efficient research and innovation system. Its foundation will be strong research universities and innovation clusters formed on the basis of high-tech park "Astana business campus" Nazarbayev University and Technopark "Alatau" in Almaty. Held in Astana International specialized exhibition EXPO - 2017 gives us a good opportunity to vigorously develop new energy based on "green technologies."
FIFTH. The new social policy
Many years of strong economic growth allows us to pursue an active social policy, several times to improve the quality of life of people. Despite all the difficulties that our economy has suffered from the negative impact of the global crisis, we always improve the welfare of Kazakhstan. In ten years, government social spending rose in real terms by almost 3 times. The number of employed in the social sector and in public administration more than 1.2 million people. The state provides a large amount of benefits and payments. They receive over 1.5 million citizens.
Against the backdrop of economic risks, in spite of everything, we will continue the implementation of measures of social support of the population. I declare that from January 1, 2016 will be increased salaries to health workers - an average of 28 percent, education - up to 29 per cent, social protection - up to 40 percent. It is helpful to use a differentiated approach to different categories of state employees. Next year will be provided a 25 percent increase in the size of social benefits for disability and loss of a breadwinner, as well as scholarships. On 1 January 2016 we index jointly retirement ahead of the inflation rate of 2 per cent. In 2016 it will be raised salaries of civil servants housing "B" - by 30 percent. Funds for this purpose, we will save after optimization of budget expenditures. Thus, we find the means to wage growth and fulfill its social obligations to the people!
I appeal to all vulnerable groups. We have always helped those in need. But at the same time, social justice must not be distorted. After all, every social payment - is an additional burden on the budget is not just, and on every working citizen of Kazakhstan. It should be clearly understood that the idea of social justice should not become a social injustice against the working people of Kazakhstan. It is their money!
Today, only a society of universal labor can become a real basis for an efficient economy resilient to external shocks. In order to expand social support charge the Government before the end of the first quarter of 2016 to develop a new roadmap employment. Funding for the program should be increased compared to the same roadmap, implemented in 2009-2010. This will ensure the stability of the labor market at the expense of projects for the development of local infrastructure and the improvement of human settlements. There will be again organized a large-scale short-term retraining and skills development. Expand microcredit for business development.
Today I put a challenge to develop a new social policy. The state's role in the social sphere should be limited to support socially vulnerable people and investment in human capital. State targeted support will be provided only to needy citizens, based on an assessment of their real incomes and living conditions. All others must earn themselves their work. Taking into account the special needs of certain categories of our citizens need to set a different minimum subsistence level to the revision of its structure. I instruct the Government within three months to make proposals for optimization of the system of social security.
State support for those who can work, should be provided only on the basis of their participation in retraining and employment programs. I instruct the Government to implement these types of social assistance, starting in 2017. The priority of the state in social policy should be massive investment in human capital. We must continue to modernize education and health, in accordance with previously adopted programs. I declare that in 2017 we will start a new project - "free vocational education for all". The government has committed to proceed with its development.
Youth of Kazakhstan!
I encourage our young people to actively explore the workings specialties. It is necessary to develop working skills. At the time, I also started with a working overalls, stood at the blast furnace hearth. Take an example! It will take years, but the experience certainly is useful to you, whatever you did not elect destiny.
In general, all the measures put forward in the Letter are real and, as always, to provide reliable funding. In 2014-2015 on the development of small and medium business has already been allocated 1 trillion tenge. In the draft program "Nurly Zhol" - 2.7 trillion tenge. Another 2.7 trillion tenge allocated to Kazakhstan by international financial institutions. People's Republic of China has granted a loan of 2.7 billion dollars. In general, the implementation of projects of this epistle is attracted 7.5 trillion tenge. Make good use of these funds - the main task and responsibility of the Government.
In overcoming the difficulties we are not alone. His balanced foreign policy activities, we acquired a lot of friends around the world. They support us. You have witnessed my visits and talks with the leaders of the leading countries of the world. With China reached an agreement on cooperation in the non-primary sector by 23 billion dollars. This building more than 40 new businesses. Visits to London and Paris have also been successful in terms of economic cooperation. The total amount of the contracts is $ 11.5 billion. Visit of the President of Russia has shown stability and strength of our traditional good-neighborly relations and economic integration. The visit of Prime Minister of Japan expands the prospects for investment and technological cooperation. The first comes to us concern "Toyota", which will produce cars in Kazakhstan.
One of the main results is the high level of confidence to our international financial institutions. At this difficult time, supporting our reforms, they discovered us access to financial resources in the amount of $ 9 billion. We signed an agreement with the European Union-depth partnership and cooperation. We are united with the world community in the struggle for a nuclear-free world against terrorism and extremism. We stand for the solution of any conflict in a peaceful way and to do it all depends on us.
The world is well aware of the reforms initiated by us, about 100 steps and support them. We must not disappoint our friends. These reforms, as well as the implementation of interrelated objectives that I set in the Message, will not be easy and perhaps even painful. But they have no alternative. If we do not do all this, we are hopelessly fall behind the world development. But we, as always, do what charted.
Dear compatriots!
Since the start of the new 2016 will earn the new laws adopted in the framework of the Plan of the Nation. Today I announced new measures designed to strengthen our economy, state and society. We all have a huge responsibility today for the future of the country. Ahead of us is waiting for hard work. The implementation of all the tasks of my Address to the Nation a special role I take the party "Nur Otan". The message should be the basis of action of all Party members and the program for the coming years. It is necessary to conduct extensive outreach, mobilize the people to unite to perform all tasks. Deputies from the Party should provide the anti-crisis law and structural reforms. I call on all political parties, public associations and all citizens imbued with a common concern for the welfare of our homeland, to take an active part in the implementation of the Message.
Difficult stage that comes to us is time to overcome. We will win a new global crisis. To do this, we have a single will, a strong tradition of unity of the people. We derive our Kazakhstan to a new level of development!
